Answer:
Product margin= $11.03
Explanation:
<u>First, we need to calculate the activities rates:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Assembly= 1,150,100 / 62,000= $18.55 per machine-hour
Processing orders= 54,554 / 1,860= $29.33 per order
Inspection= 194,310 / 2,550= $76.2 per inspection-hour
<u>Now, we can allocate overhead to Product W26B:</u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly= 18.55*1,610= $29,865.5
Processing orders= 29.33*65= $1,906.45
Inspection= 76.2*30= 2,286
Total allocated costs= $34,057.95
Unitary allocated overhead= 34,507.95 / 990= $34.86
Finally, the unitary cost and product margin:
Total unitary cost= 34.86 + 52.35 + 17.21= $104.42
Product margin= 115.45 - 104.42
Product margin= $11.03
